Compensating Balances. The stated bank loan rate is 8 percent, but the loan requires a compensating balance
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Compensating Balances. The stated bank loan rate is 8 percent, but the loan requires a compensating balance of 10 percent on which no interest is earned. What is the effective interest rate on the loan? What happens to the effective rate if the compensating balance is doubled to 20 percent?
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Related Book For
Study Guide To Accompany Fundamentals Of Corporate Finance
ISBN: 9780073012421
5th Edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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